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Chupa Chupa

macrumors G5
Jul 16, 2002
14,835
7,396
But true advancements in technology should not just add convenience at the same or higher price (essentially just more luxury) but also offer them at a better price ultimately making life better while still making a profit for the seller (i.e. if your costs go down, then your price can too, while maintaining profit).

Maybe they shouldn't in an ideal world but again economics dictates market pricing. It's a simple supply/demand curve equation where as the supply of ones "free" time goes down the demand for time saving convenience goes up. As the demand for that convenience goes up so does the price set for that convenience.

The product itself - is the video. The video is fungible. It's one's time that is not. There are alternative scenarios here too such as lack of desire to go to a physical kiosk or nearby availability, lack of equipment to play physical media, ect. In all those cases it's still the same supply/demand curve with the demand, the desire to see the video at that very moment being higher than the supply, the motivation to go to a kiosk or ability to play a physical video being lower.

Basing the supply and demand on a convenience product is the wrong way to look at it because its ease of access that is being marketed. Also companies do not voluntarily put a cap on profit margins. There goal is to reap as much profit as the market will bear. So "maintaining profit" is a bit illusory since there is no definition what a proper profit is -- goals are going to vary from company to company depending on their business plan. But as competitive as this market is prices seem to be going up, not down. It's because people's "free" time keeps getting more and more compressed and picking up or returning a disc is not worth saving $4 to $4.50 especially when it's presumably not the frequent.
 

Tinmania

macrumors 68040
Aug 8, 2011
3,528
1,016
Aridzona
Maybe they shouldn't in an ideal world but again economics dictates market pricing. It's a simple supply/demand curve equation where as the supply of ones "free" time goes down the demand for time saving convenience goes up. As the demand for that convenience goes up so does the price set for that convenience.
In any other area I could agree with this. But not in a market ingrained (and controlled) with old-school mentality.

In addition, the product that Netflix would be selling has a price they do not control. It is the media companies, and they still treat streaming as a necessary evil rather than a new opportunity. This is arguably what drove Netflix and Amazon to create their own content.


Mike
 
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